Amazon has unveiled a $10 credit-card reader and mobile app for businesses this week, expanding further into bricks-and-mortar retail and the rapidly evolving mobile payments arena.

The move puts the company against a number of rivals like startup Square, which popularized a card swiper that plugs into a smartphone or tablet, according to Reuters. This will allow small- and mid-sized businesses like food trucks and coffee shops to quickly accept credit and debit transactions.

The new system, which has been called Amazon Local Register, would give the company important data on how U.S. consumers shop offline.

At least 90 percent of U.S. retail sales still take place in physical stores, according to U.S. government data.

Amazon spokeswoman said all data from Amazon Local Register customers would be protected and would not be used just for fraud protection and risk management.

"There may be some hesitation among merchants to process payments through Amazon due to data sharing or competitive concerns," R.W. Baird analyst Colin Sebastian wrote this week, according to Reuters.

Amazon hopes to court small businesses in part by charging lower fees than Square and eBay/ PayPal. People who sign up for Amazon's program before October 31 will be charged 1.75 percent for each card used until January 2016.

Amazon will take a 2.5 percent cut of each card swipe for those who sign up after October, according to Reuters. This is less than Square's 2.75 percent flat transaction rate and PayPal's 2.7 percent.

Amazon's move "was indicative of the blurring lines between commerce and payments, and ultimately Amazon competing against eBay/PayPal, Google and Apple in the mobile payment space," Sebastian said.

Big technology firms like Apple and Google may could also step up their investment in mobile payments as well.

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